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Wenceslaus Murape
Lately, the media has been awash with reports of arbitration awards in disputes between companies and also in favour of workers against employers.
Questions have ultimately been asked about the role of the arbitrator and what sort of award he can give.
An arbitrator must conduct the arbitration in accordance with the provisions set out in the submission to arbitration but in the absence of agreement, he must comply with the provisions of the Model Law.

These include recording of any evidence taken on oath, although arbitrators need not necessarily hear oral evidence. An arbitrator may administe0r an oath. He may make an award conditional upon the findings of the Supreme Court on any points of law or may state a special case for the opinion of the Supreme Court on any question of law. The arbitrator must act fairly. He should keep a record or ensure that one is kept.

He must make a decision which is certain and in writing within the time limits specified. The award must be possible and legal. He should make an award as to costs unless these have been otherwise agreed. The award shall be made in writing and shall be signed by the arbitrator or arbitrators. In arbitral proceedings with more than one arbitrator, the signatures of the majority of all members of the arbitral tribunal shall suffice, provided that the reason for any omitted signature is stated.

The award shall state the reasons upon which it is based, unless the parties have agreed that no reasons are to be given, or the award is an award on agreed terms under Article 30 of the Model Law.

The award shall state its date and the place of arbitration as determined in accordance with Article 20. The award shall be deemed to have been made at that place. After the award is made, a copy signed by the arbitrators shall be delivered to each party.

Unless otherwise agreed by the parties, the cost and expenses of an arbitration, including the legal and other expenses related to the arbitration, shall be as fixed and allocated by the arbitral tribunal in its award.

Where the award does not specify otherwise, each party shall be responsible for his own legal and other expenses of the arbitral tribunal and any other expenses related to the arbitration.

Unless otherwise agreed by the parties, an arbitral tribunal may award interest at such rate, on such sum and for such period as may be specified in the award.

Where the award does not specify otherwise, a sum directed to be paid by the award shall carry interest from the date of the award up to the date of payment at the same rate as a judgment debt.

Also unless agreed, an arbitral tribunal shall have the power to make an interim, interlocutory or partial award. It must be in writing and in the absence of other provisions, must be made within two months of the date of appointment of the arbitrator.

It must be signed by the arbitrator or all arbitrators. It must state the reasons on which it is based unless the parties have agreed otherwise, or is an award on agreed terms under Article 30, in which case the reasons for the award shall be unnecessary.

In Origen Corporation (Pvt) Ltd versus Delta Operations (Pvt) Ltd 2005 (2) ZLR 349 (H), the applicant sought the setting aside of an arbitrator’s award while the respondent sought to have it enforced.

In terms of the contract between the parties, the applicant was to deliver a specified tonnage of barley suitable for brewing, while the respondent was to deliver an equal tonnage suitable for stock feed. The contract provided that if there was shortfall in the applicant’s delivery, the applicant would pay a specified sum for every tonne short.

The dispute was referred to arbitration, there being two questions for the arbitrator; whether the respondent was entitled to an order for specific performance and whether interest was payable. In his award, the arbitrator ordered the applicant to deliver the shortfall failing which it would pay the respondent what it would actually cost the respondent to buy the shortfall from elsewhere.

The applicant argued, in respect of the second part of the award, that the arbitrator should have enforced the penalty provision; that the award conflicted with the law of Zimbabwe, that the effect of the order was to give the respondent more than it expected than the law allowed; and that the arbitrator had failed to give reasons for the award. It was held that the arbitrator was obliged to give reasons. It was further held that the arbitrator had ignored a penalty stipulation which he should have enforced. In addition it was held further, that for a breach of contract, the damages should be assessed as at the date of performance or the date of breach.

The arbitrator had awarded damages based on a value which was determined several months later and which was much higher than the stipulated amount. For these reasons, the award would be set aside.

The Arbitrator must deliver a copy of his award to each party after making an award. The arbitrator shall make a ruling as to the costs and expenses of the arbitration, failure of which each party shall bear its own costs and expenses and in equal proportion for the fees and expenses of the arbitral tribunal.

On appeal Delta Operations (Pvt) Ltd versus Origen Corporation (Pvt) Ltd 2007 (2) ZLR 81 (S), the Supreme Court noted that in the court a quo, the respondent sought the setting aside of an arbitrator’s award, while the appellant sought to have it enforced.

In terms of the contract between the parties, the respondent was to deliver a specified tonnage of barley suitable for brewing, while the appellant was to deliver an equal tonnage suitable for stock feed.

The contract provided that if there was a shortfall in the respondent’s delivery, the respondent would pay a specified amount for every tonne short.

On appeal, it was held that the arbitration award was contrary to public policy. The arbitrator had granted remedies which were not available to the appellant in terms of the contract. These were specific performance and the alternative relief granted in the second part of the award, that in failing to deliver the shortfall Origen should pay what it would actually cost Delta to buy the shortfall from elsewhere. By granting the alternative relief, the arbitrator deliberately ignored or disregarded Section 4 (1) of the Contractual Penalties Act (Chapter 8:04).The arbitrator created an issue between the parties which did not arise from the submissions and awarded a measure of damage which went so far outside the contract as to create a new contract for the parties.

In terms of Article 31 (2) of Model Law, the arbitrator is obliged to state the reasons upon which the award is based, but did not do so in this case.

This is in conflict with the public policy of Zimbabwe and invalidated the alternative award.

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